What KYC consideration must Marketplaces ensure during user onboarding?

During user onboarding, Marketplaces must focus on verifying users in a phased approach as it ensures compliance with Know Your Customer (KYC) regulations. Phased verification allows for a more controlled process where the initial onboarding can start with basic information, such as identity verification and document submission. This approach helps build trust and allows the Marketplace to monitor risk levels gradually, adjusting procedures to gather more comprehensive data as the user progresses in their transactions or interactions on the platform.

Additionally, a phased approach is beneficial in cases where immediate, thorough compliance may not be feasible. It provides flexibility in onboarding while still maintaining a level of diligence required by KYC regulations to prevent fraud and illegal activities. This careful vetting process ultimately helps protect both the users and the Marketplace from potential legal and financial risks.